Court File and Parties

COURT FILE NO.: CV-16-548539 DATE: 20180920 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: YORK REGIONAL STANDARD CONDOMINIUM CORPORATION NO. 1206, Plaintiff AND: 520 STEELES DEVELOPMENTS INC., 7 BRIGHTON PLACE INC., KANTIUM DEVELOPMENT & CONSTRUCTION INC., LIBERTY DEVELOPMENT CORPORATION, DARCON INC., MONDCONSULT LIMITED , YORK REGION COMMON ELEMENT CONDOMINIUM 1210, AFFINITY ALUMINUM SYSTEMS LTD., JIT PROFESSIONAL SERVICES INC., SIU HONG (ERNIE) LEUNG, P. ENG., QUEST WINDOW SYSTEMS INC., ROUSLAN TCHOLII, P. ENG., YA PING (TOM) ZHANG, P. ENG., TOM’S STRUCTURAL STEEL DETAILING, YA PING (TOM) ZHANG STRUCTURAL ENGINEERING & SOLUTION DEVELOPERS, NASSER HEIDARI, P. ENG., NCN ENGINEERING SERVICES LTD., NCN ENGINEERING SERVICES INC., TORSTEEL COMPANY LIMITED, VORSTADT INCORPORATED, VORSTADT’S SUPERIOR ROOF, VORSTADT’S SUPERIOR SHEET METAL LTD., DURON ONTARIO LTD., C&A TEDESCO WATERPROOFING INC., SAVERINO GENERAL CONTRACTORS LTD., ADVANCED PRECAST INC., MUKESH PATEL, P. ENG., MRP DESIGN SERVICES, DELGANT (CIVIL) LTD., DELGANT CONSTRUCTION LTD., DEGLANT LIMITED, RESFORM CONSTRUCTION LTD., GREEN VALLEY INC., GLOBAL PLUMBING & HEATING INC., SYSTEM DRYWALL & ACOUSTICS, MAYFAIR ELECTRIC LTD., YORK SHEET METAL LTD., ADJELEIAN ALLEN RUBELI LIMITED, SIGMUND SOUDACK & ASSOCIATES INC., UNITED ENGINEERING INC., A&G ENGINEERING LTD., DISANO SPRINKLER DESIGN LIMITED, EXP SERVICES INC./LES SERVICES EXP INC., BUILDING SCIENCES INC., RAFAEL & BIGAUSKAS ARCHITECTS INC., SEDUN+KANERVA ARCHITECTS INC., STRYBOS BARRON KING LTD., STRYBOS ASSOCIATES LTD., SIMERRA PROPERTY MANAGEMENT INC., SIMERRA PROPERTY MANAGEMENT LTD., 360 COMMUNITY MANAGEMENT LTD., BLANDFORD CONSTRUCTION SERVICES INC., MARNICK FIRE PROTECTION INC. and DEFENDANTS #1, #2, #3, #4, #5, #6, #7, #8, #9, #10, #11, #12, #13, #14, #15, #16, #17, #18, #19, and #20, Defendants

BEFORE: Sanfilippo J.

COUNSEL: William Sharpe and Clifford Blundell, lawyers for the Plaintiff/ Respondent Gavin Tighe and Anna Husa, lawyers for the Defendant/ Moving Party Liberty Development Corporation Alexander Paul, lawyer for the Defendant Darcon Inc.

HEARD: In writing

Endorsement on Costs

Overview

[1] The motion brought by Liberty Development Corporation (“Liberty”) for summary judgment was dismissed on the basis of my Reasons for Decision released on June 15, 2018. Paragraph 101 of those Reasons for Decision encouraged Liberty, the plaintiff York Regional Standard Condominium Corporation No. 1206 (“YRSCC No. 1206”), and Darcon Inc. (“Darcon”) to discuss and attempt to resolve the issue of costs, including the costs that had been reserved on certain other motions that derived from Liberty’s summary judgment motion.

[2] The parties were not able to agree on the outstanding issues of costs, either on the summary judgment motion or its derivative proceedings, and delivered written cost submissions in accordance with the procedure set out in paragraph 102 of my Reasons for Decision.

[3] For the reasons that follow, I have determined that YRSCC No. 1206 is entitled to costs for the summary judgment motion, payable by Liberty on a partial indemnity basis in the amount of $60,000, all inclusive. I have further determined that Liberty is entitled to costs for the four other cost issues reserved on certain motions that derived from the summary judgment motion, payable by YRSCC No. 1206, all on a partial indemnity basis, collectively totaling the amount of $34,261.12, all inclusive.

A. Cost Issues to be Determined

[4] The plaintiff YRSCC No. 1206 brought five motions layered on Liberty’s summary judgment motion. These motions caused the summary judgment motion to be adjourned on two occasions, September 29, 2017 and January 3, 2018, resulting in costs thrown away. In total, there were seven cost events before the hearing of the summary judgment motion, some already awarded and some reserved to be determined now, summarized as follows:

a) On the first return date for Liberty’s summary judgment motion, September 29, 2017, the plaintiff brought a cross-motion to stay, suspend or quash Liberty’s motion. The plaintiff’s stay motion was dismissed, and the plaintiff was granted an opportunity, in the interim, to argue a motion for questions improperly refused and additional documentary production. In paragraph 27 of my Reasons for Decision of October 13, 2017, I ordered that the costs of the plaintiff’s motion to stay were reserved to be heard on the second return of Liberty’s summary judgment motion. These costs will be referred to as the “Costs of the September 2017 Motion to Stay”.

b) As September 29, 2017 was spent hearing the plaintiff’s stay motion, Liberty’s motion was required to be adjourned to January 3, 2018. In paragraph 30 of my Reasons for Decision of October 13, 2017, I ordered that costs thrown away because of the adjournment were reserved to be heard on the second return of Liberty’s summary judgment motion. These costs will be referred to as the “Costs of the September 2017 Adjournment”.

c) On November 3, 2017, the plaintiff’s motion for questions improperly refused and for additional documentary production was dismissed, without substantive determination, due to non-compliance with the terms set out on September 29, 2017. Costs were awarded to Liberty in the amount of $6,755.13 and to Darcon in the amount of $1,552, payable by YRSCC No. 1206. This cost award will be referred to as the “November 2017 Cost Award”.

d) On January 3, 2018, at the second return of Liberty’s summary judgment motion, the plaintiff brought two motions: a motion to stay Liberty’s motion on the basis that the plaintiff was seeking leave to appeal the November 2017 Order dismissing its motion, and a motion for leave to amend its 2nd Amended Statement of Claim. These motions were determined as follows:

(i) The plaintiff’s motion for leave to amend its 2nd Amended Statement of Claim was adjourned to be heard on January 18, 2018 due to deficiencies in the plaintiff’s service of this motion.

(ii) The plaintiff’s motion to stay Liberty’s summary judgment motion was dismissed. Costs of this motion were awarded to Liberty payable by YRSCC No. 1206 in the amount of $3,000. This cost award will be referred to as the “Cost Award of the January 2018 Motion to Stay”.

(iii) Liberty’s summary judgment motion was adjourned to March 5, 2018. On the basis of Reasons for Decision dated January 12, 2018, Liberty was awarded costs in the amount of $17,500, payable by the plaintiff, YRSCC No. 1206. This cost award will be referred to as the “Cost Award of the January 2018 Adjournment”.

e) On January 18, 2018, I heard the plaintiff’s motion for leave to amend the 2nd Amended Statement of Claim to add 35 additional paragraphs and to amend 31 existing paragraphs. By Reasons for Decision issued January 25, 2018, I denied the plaintiff leave to add 10 of the proposed paragraphs that I determined to be non-compliant with Rule 26 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. I encouraged the parties to agree on the issue of costs, failing which they were directed to make submissions on costs at Liberty’s summary judgment motion on May 5, 2018. These costs will be referred to as the “Costs of the Pleading Amendment Motion”.

f) On March 5, 2018, on the third return date for Liberty’s summary judgment motion, the plaintiff returned a motion to admit into evidence a report prepared by Michael Kruse, seeking to qualify Mr. Kruse as an expert. This motion was initially brought on September 29, 2017 and was adjourned in tandem with the summary judgment motion to which it pertained. I dismissed this motion. The cost consequences of this motion will be referred to as the “Costs of the Expert Report Motion”.

[5] For completeness of analysis, I note that a one-hour hearing was conducted on February 16, 2018 at which the plaintiff sought leave for further amendment to its 3rd Amended Statement of Claim. Liberty, in its written submissions, asks for a cost determination for this hearing. However, this motion was not completed, but rather was adjourned to a date to be fixed. There are no cost consequences to be determined in relation to this incomplete motion.

[6] I am required to determine five costs issues:

1. Costs of the September 2017 Motion to Stay: The plaintiff asks that costs be awarded to the plaintiff in the cause. Liberty asks for costs payable by the plaintiff on a partial indemnity basis, fixed in the amount of $13,261.12, all inclusive.
2. Costs of the September 2017 Adjournment. The plaintiff asks that costs be awarded to the plaintiff in the cause. Liberty asks for costs payable by the plaintiff on a partial indemnity basis, fixed in the amount of $14,500, all inclusive.
3. Costs of the Pleading Amendment Motion. The plaintiff asks for costs payable by Liberty as to 90% and Darcon as to 10%, on a partial indemnity basis, fixed in the amount of $85,335.73, all inclusive. Liberty asks for costs payable by the plaintiff on a partial indemnity basis, fixed in the amount of $26,010.91, all inclusive.
4. Costs of the Expert Report Motion. The plaintiff submits that no party should receive costs of this motion. Liberty asks for costs payable by the plaintiff on a partial indemnity basis, fixed in the amount of $10,003.33, all inclusive.
5. Costs of the Summary Judgment Motion. The plaintiff submits that costs should be payable by Liberty as to 90% and Darcon as to 10%, on a substantial indemnity basis, fixed in the amount of $243,910.46, all inclusive. Liberty submits that costs ought to be awarded in the cause, with the amount to be determined by the trial judge.

[7] Darcon was not the moving party on any of the motions. Darcon was a responding party on the pleading amendment motion, as were all defendants, but took no position on the amendments sought. Importantly, Darcon was neither a co-moving party nor a responding party on Liberty’s summary judgment motion.

[8] Darcon contends that it is not liable to the plaintiff for costs. Simply, Darcon did not seek any relief from the plaintiff and did not oppose any relief sought by the plaintiff. Darcon submits that it ought to receive costs from the plaintiff for the expenses incurred by its participation in these motions, on a partial indemnity basis, fixed in the amount of $34,420.57, all inclusive.

Dismissal of the Plaintiff’s Claim for Restitution of Cost Awards Already Rendered

[9] The plaintiff, in its written submissions, requests determination of a further cost issue. The plaintiff submits that it is entitled to restitution for the three cost awards that I ordered against it, namely: the November 2017 Cost Award, the Cost Award of the January 2018 Motion to Stay, and the Cost Award of the January 2018 Adjournment.

[10] The plaintiff did not cite any authority or legal principle in support of the proposition that these cost awards rendered in favour of Liberty and Darcon ought now effectively to be reversed. These three cost awards were rendered. Two were not appealed, and leave to appeal the third, the November 2017 Cost Award, was denied. I see no merit to the plaintiff’s submission on this issue. These cost awards will not be reconsidered. The plaintiff’s claim that it is entitled to restitution of these three cost awards is dismissed.

B. Analysis – Entitlement to Costs

[11] Having determined that there are five cost issues to be determined, not six as submitted by Liberty through inclusion of the hearing of February 16, 2018, and having dismissed the plaintiff’s claim for restitution of three cost awards already rendered, I will analyze the applicable principles, Rules, and case authorities pertaining to the issue of costs, starting with the issue of entitlement.

Costs Follow the Event

[12] The established principle is that, absent special circumstances, “costs follow the event”: Bell Canada v. Olympia & York Developments Ltd., 1994 ONCA 239, 17 O.R. (3d) 135; Yelda v. Vu, 2013 ONSC 5903, leave to appeal denied, 2014 ONCA 353, 64 M.V.R. (6th) 177, at para. 11. In 1318706 Ontario Ltd. v. Niagara (Regional Municipality) (2005), 75 O.R. (3d) 405 (C.A.), at para. 50, the Ontario Court of Appeal applied the following statement of principle from Larter v. Universal Sales Ltd. (1991), 113 N.B.R. (2d) 18 (C.A.), at pp. 67-68:

In M.M. Orkin, The Law of Costs, 2d ed. (Aurora, Ont.: Canada Law Book, 1987) at p. 2-13, the author points out that the principle that a successful party is entitled to his costs is of long standing and should not be departed from except for very good reasons. One might depart from the rule if there has been (1) misconduct of the parties, (2) miscarriage in the procedure, or (3) oppressive and vexatious conduct of proceedings.

[13] This principle was recently re-stated in Ehsaan v. Zare, 2018 ONCA 453 at para. 10:

While an award of costs is always discretionary and the court has the discretion not to award any costs to the successful party, the latter discretion should be exercised sparingly. The general principle that a successful party is entitled to costs should not be departed from except for very good reasons.

[14] I do not find that the conduct of any party requires departure from the principle that the successful party is entitled to costs. The task then is to determine which party was the successful party, and thereby prima facie entitled to costs, in regard to each of the cost issues under analysis.

Entitlement to Costs of the September 2017 Motion to Stay

[15] The plaintiff’s motion to stay of September 29, 2017 was based on the plaintiff’s position that Liberty’s summary judgment motion was brought contrary to the direction of the case management judge, and based on its claims that Liberty had failed to make proper documentary production and had improperly refused to answer questions. The plaintiff had been directed by the case management judge and the case management master that it ought to raise these claims as part of its responding position in Liberty’s summary judgment motion.

[16] The plaintiff’s September 2017 Motion to Stay was dismissed as it failed to establish a basis for the stay of Liberty’s summary judgment motion. The plaintiff’s motion to stay was unnecessary, and added costs and delay to the determination of Liberty’s summary judgment motion. The cost issue was reserved to be addressed at the next return of Liberty’s summary judgment motion. However, it was not addressed on that date because of subsequent motions brought.

[17] Liberty was successful in resisting this stay motion. I find that Liberty is entitled to the costs of the dismissal of the September 2017 Motion to Stay, payable by YRSCC No. 1206.

Entitlement to Costs of the September 2017 Adjournment

[18] The plaintiff’s first motion to stay consumed the time set aside for argument of Liberty’s summary judgment motion on its first return date, September 29, 2017. As a result, Liberty’s preparation for the argument of its motion that day was wasted.

[19] The Costs of the September 2017 Adjournment consist of the costs that Liberty threw away in preparing for argument of its summary judgment motion and ultimately being deprived of the opportunity to do so by the plaintiff’s stay motion. I have found that the Costs of the September 2017 Motion to Stay shall be paid by the plaintiff to Liberty. It follows that the costs of the September 2017 Adjournment are similarly payable by the plaintiff to Liberty.

Entitlement to Costs of the Pleading Amendment Motion

[20] The plaintiff brought its pleading amendment motion on January 3, 2018, on the second return of Liberty’s summary judgment motion. This motion was brought together with the plaintiff’s second motion to stay. Liberty contended that the pleading amendment motion was a tactic by the plaintiff to strategically bolster its claims against Liberty before Liberty had an opportunity to argue its summary judgment motion.

[21] The plaintiff sought and obtained an adjournment of the pleading amendment motion from January 2, 2018 to January 1, 2018 because the plaintiff had not served its motion record on all defendants and because the motion record was short-served.

[22] The plaintiff’s overhaul of its 2nd Amended Statement of Claim was extensive. The plaintiff sought to add or amend 65 paragraphs in converting the pleading into the 3rd Amended Statement of Claim.

[23] In the result:

a) No party, including Liberty, opposed the addition of 5 paragraphs and the amendment of 31 paragraphs to the 3rd Amended Statement of Claim;

b) Liberty’s opposition focused on 30 additional paragraphs that the plaintiff sought to add to its proposed 3rd Amended Statement of Claim, all of which were directed to bolster the claims advanced by the plaintiff against Liberty. These 30 paragraphs were identified as paragraphs 111.1 to 111.30. The disposition of these 30 paragraphs proposed to be added was as follows:

i) At the hearing, Liberty withdrew its opposition to 14 of the paragraphs proposed to be added;

ii) The basis for Liberty’s opposition to 6 of the paragraphs proposed to be added was not established. The plaintiff was granted leave to add these paragraphs to its 3rd Amended Statement of Claim; and

iii) The basis for Liberty’s opposition to 10 of the paragraphs proposed to be added was established. The plaintiff was denied leave to add these paragraphs to its 3rd Amended Statement of Claim.

[24] In paragraph 66 of my Reasons for Decision released on January 25, 2018 regarding the determination of the pleading amendment motion, the parties were encouraged to discuss and resolve the issue of costs pertaining to this motion. They were not able to do so and, in accordance with the procedure set out in paragraph 67 of these Reasons for Decision, were invited to make submissions on the costs of this motion at the return of Liberty’s summary judgment motion. This was for efficiency, and not because the cost of the pleading amendment motion was in some manner connected to the outcome of Liberty’s summary judgment motion.

[25] The plaintiff contends that it is entitled to costs because Liberty’s resistance to any amendment by the plaintiff of its 2nd Amended Statement of Claim on the basis of abuse of process was denied. The plaintiff was successful in being granted leave to amend, but Liberty was successful in its opposition to ten paragraphs proposed to be added to the 3rd Amended Statement of Claim. Liberty agreed, or did not oppose, many of the other amendments, albeit in several cases during the course of argument and thereby not in a manner that saved costs.

[26] Having fully considered the parties’ submissions in relation to the costs of the pleading amendment motion, I have determined that Liberty had reasonable grounds to resist the relief sought and that Liberty was more successful than the plaintiff on the contested amendments. Liberty is entitled to costs of the Pleading Amendment Motion, payable by the plaintiff. The issue of divided success will be taken into consideration in the assessment of the amount of costs.

Entitlement to Costs of the Expert Report Motion

[27] In the days leading to the first return date for Liberty’s summary judgment motion, September 29, 2017, the plaintiff sought to admit into evidence a report prepared by Michael Kruse. Liberty contested the admissibility of this report. The plaintiff’s motion to admit Mr. Kruse’s report was held down, and adjourned for argument at the same time as Liberty’s summary judgment motion.

[28] In the Reasons for Decision of June 15, 2018, the plaintiff’s motion to admit this report was determined as a preliminary issue. The motion was denied, and the report was excluded, by reason of the report’s failure to satisfy the criteria set out in R. v. Mohan, [1994] 2 S.C.R. 9, and White Burgess Langille Iman v. Abbott and Haliburton Co., 2015 SCC 23, [2015] 2 S.C.R. 182.

[29] The plaintiff submitted that it was reasonable to lead expert evidence on the issue of whether Liberty was operationally involved in the construction management. I disagreed. The plaintiff submits that the time required for this motion was minimal, such that Liberty ought not to receive any cost award for it. I do not agree. The issue of this expert report permeated all three occasions on which Liberty’s summary judgment motion came before the court.

[30] Liberty was successful in resisting the admission of the report of Mr. Kruse. Liberty is entitled to an award of costs in relation to this motion, payable by the plaintiff.

Entitlement to Costs of the Summary Judgment Motion

[31] Liberty’s summary judgment motion was first filed in May 2017. Liberty sought the dismissal of the claims pleaded against it in the 2nd Amended Statement of Claim, which consisted of 257 paragraphs of allegations against 53 defendants set out in 65 pages.

[32] Liberty’s motion was predicated on the single proposition that Liberty “did not develop the land at issue and had no connection to any development, design, construction or other activities on the land”, as is stated at paragraph 16 of the affidavit of Liberty’s senior vice-president, Michael Ulster, sworn April 26, 2017. This evidence underscored Liberty’s single substantive affirmative defence plea in its Statement of Defence, filed jointly with Darcon: simply, that Liberty did not manage, indeed did not have operational involvement in, the condominium project in issue.

[33] Liberty’s motion focused on the absence of a construction management contract between Liberty and the plaintiff, and on Darcon’s admission that it had entered into precisely such a contract with the plaintiff for the construction management of the condominium project in issue.

[34] Had Liberty been able to argue its summary judgment motion on September 29, 2017 or, indeed, January 3, 2018, its obstacles to achieving a dismissal would have been limited to the allegations pleaded against it in the 2nd Amended Statement of Claim. However, as discussed earlier, on each occasion Liberty’s motion was held down by motions brought by the plaintiff to stay Liberty’s summary judgment motion. While the plaintiff’s motions were dismissed, they had the practical impact of delaying the hearing of Liberty’s summary judgment motion.

[35] The breadth and scope of the case framed by the plaintiff against Liberty was expanded by the pleading amendment raised by the plaintiff in December 2017 and brought before the court on motion on January 3, 2018. The result of the pleading amendment motion was that the plaintiff added or amended 65 paragraphs of its 257 paragraph 3rd Amended Statement of Claim, principally directed at bolstering its claims against Liberty. The 3rd Amended Statement of Claim expanded by eight pages, all of which were predominantly focused on Liberty.

[36] In the result, Liberty’s summary judgment motion failed to establish a basis for Liberty to be dismissed from the case advanced against it in the 3rd Amended Statement of Claim. No determination has been made, or will be made, regarding whether Liberty would have had a different result if its motion for summary dismissal were based on the 2nd Amended Statement of Claim: thinner by eight pages of allegations against Liberty. This raises the question of whether the plaintiff ought to be rewarded with costs for meeting Liberty’s summary judgment motion not on the basis of the action then-pleaded, but rather through amending its pleading.

[37] Had Liberty withdrawn its motion for summary judgment at the time of the pleading amendment, an assessment could have been made as to which party ought to bear responsibility for the costs sustained in pursuit of a summary judgment motion that had been radically altered by pleading amendment. Rule 37.09 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 would have provided the plaintiff with entitlement to costs, subject to the court’s discretion.

[38] Liberty submits that the costs of the summary judgment motion ought to be in the cause as, in the final analysis, the plaintiff may not prevail in the case against Liberty at trial. Liberty contends that there is the possibility that, in the final analysis, the plaintiff will be revealed to have crafted myriad allegations and theories of liability against Liberty without substantive merit solely for the strategic purpose of keeping Liberty in this action. In such an event, Liberty states that the plaintiff ought not to be rewarded by receipt of an interlocutory cost award. Rather, Liberty submits that the plaintiff ought only to receive costs if it ultimately proves its case at trial.

[39] There is case authority for such an approach. In Drywall Acoustic Lathing and Insulation Local 675 Pension Fund (Trustees of) v. SNC-Lavalin Group Inc., 2017 ONSC 3369, at para. 10, Perell J. ordered that costs of the motion be in the cause where “it would be unfair and unjust that the party that won the battle but lost the war should receive costs from the ultimate victor of the case.” Similar determinations were made in Quizno’s Canada Restaurant Corp. v. 1450987 Ontario Corp., 2009 ONSC 31599 (Ont. SCJ); Smith (Estate) v. National Money Mart Co. (2008), 2008 ONSC 45406, 92 O.R. (3d) 224 (S.C.J.); and Kelly v. Ontario (Minister of Energy), 2014 ONSC 6413.

[40] While I agree that there is a role for an order for costs in the cause following a summary judgment motion, this is not such a case. I do not consider that fairness requires that the costs generated by this motion need to be connected to the result at trial, which is the premise that runs through the cases in which costs are ordered to follow the determination at trial.

[41] The evidentiary record on this motion was insufficient to allow me to use the tools set out in Rule 20.04(2.1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and was therefore insufficient to allow for a determination of the merits of the plaintiff’s claims against Liberty. It would not be fair, in these circumstances, to deprive the plaintiff of a cost award until success is proven at trial when the burden of sufficiently establishing the evidentiary record for the summary judgment was on Liberty.

[42] Liberty’s motion was not successful. Liberty made a decision to proceed with its summary judgment motion after assessment of the extensive pleading amendment and, indeed, as I will discuss later, after proposing to withdraw its motion on the condition that it receive costs. In proceeding, Liberty caused further expense to be incurred in the development of a record that I found to be insufficient to allow for summary determination. I see no basis to depart from the principle that costs follow the event.

[43] All matters considered, I have determined that YRSCC No. 1206 is entitled to costs of the dismissal of the summary judgment motion, payable by Liberty.

Darcon’s Role in the Cost Issues

[44] Darcon was neither a moving nor responding party in the cost issues under consideration. Darcon had no interest in Liberty’s summary judgment motion. Darcon’s role throughout the summary judgment motion and derivative proceedings was to defend the repeated submissions by the responding party plaintiff that Darcon’s representative had not properly complied with his obligations as a witness under Rule 39.03 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, including submissions on the propriety of his refusal to answer certain questions. As well, Darcon was interested in monitoring the amendments affecting the 3rd Amended Statement of Claim, and the timing for Darcon to deliver a responsive defence pleading.

[45] All matters considered, the plaintiff has not established a basis for a cost entitlement against Darcon. Similarly, Darcon has not established a basis for entitlement to a cost award against the plaintiff. I have determined that Darcon will neither receive nor be required to pay costs.

C. Analysis – The Amount of Costs

[46] Having determined entitlement to costs for each of the five outstanding cost issues, I will now assess and fix the amount of costs in regard to each of these cost awards.

Scale of Costs

[47] In the four cost orders that will be made in favour of Liberty, namely the Costs of the September 2017 Adjournment, the Costs of the September 2017 Motion to Stay, the Costs of the Pleading Amendment Motion and the Costs of the Expert Report Motion, Liberty does not seek costs on a substantial indemnity basis but rather asks that costs be assessed on a partial indemnity basis. I so order.

[48] The plaintiff seeks Costs of the Summary Judgment Motion on a substantial indemnity basis, principally on the following grounds:

a) Rule 20.06 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which provides that a court may fix and order payment of costs on a substantial indemnity if the moving party “acted unreasonably by making the motion”;

b) Rule 49.13 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which provides that a court may, in exercising its discretion with respect to costs, “take into account any offer to settle made in writing”.

Did Liberty Act Reasonably in Bringing its Summary Judgment Motion

[49] In Young v. Young, [1993] 4 S.C.R. 3 at p. 134, McLachlin J. described, generally, the circumstances when elevated costs are warranted as “only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties.” This principle is noted in Mortimer v. Cameron (1994), 17 O.R. (3d) 1 (C.A.) at p. 23, where Robins J.A. stated that an award of costs on an elevated scale ought to be ordered only in “rare and exceptional cases to mark the court’s disapproval of the conduct of a party in the litigation.” In Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66 at para. 28, the Court of Appeal stated that an elevated cost award ought to be considered where the “losing party has engaged in behavior worthy of sanction.”

[50] The general principles stated in Young are reflected in Rule 20.06 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. I do not find that the plaintiff has established that Liberty acted in a manner that would give rise to an elevated award of costs in the circumstances and according to Rule 20.06 and the principles set out in Young. The plaintiff has not established that the defendant acted unreasonably in bringing the summary judgment motion when it did in May 2017. Liberty’s motion was predicated on Darcon’s execution of the construction management contract with the plaintiff and Darcon’s concession that it, and not Liberty, was the construction manager. Although these elements proved too narrow to allow Liberty to succeed on its motion, they establish that Liberty had a foundation for its motion on the claims that it faced at that time.

[51] An award of costs on an elevated scale requires something more than simply bringing forward a motion that is unsuccessful.

The Offers by Both Parties to Withdraw the Summary Judgment Motion

[52] Rule 49.02(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 states that the offer to settle provisions set out in Rule 49 are applicable to motions. Rule 49.13 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provides the court with the discretion to take into consideration any offer to settle made in writing as part of its exercise of discretion with respect to costs.

[53] The offers to settle that have been produced as part of the cost submissions show that both Liberty and the plaintiff offered the withdrawal of the summary judgment motion on terms and, with it, both offered to consent to the plaintiff’s leading amendment:

a) On December 21, 2017, Liberty offered to consent to the issuance of the 3rd Amended Statement of Claim on the conditions that Liberty’s summary judgment motion would be withdrawn and on the plaintiff’s agreement to pay Liberty the costs of the summary judgment motion on a substantial indemnity basis;

b) On January 17, 2018, the day before the argument of the pleading amendment motion, the plaintiff delivered an offer to settle that had the following terms:

i) Liberty was required to consent to the filing of the 3rd Amended Statement of Claim;

ii) Liberty was required to withdraw its summary judgment motion, and not re-institute the motion without leave of the case management judge;

iii) The costs of Liberty’s summary judgment motion were to be reserved to the plaintiff in the cause, at trial.

c) On February 2, 2018, the plaintiff stated to Liberty that: “Our clients’ respective offers are close to ad idem except for costs.” The plaintiff proposed mediation on the disposition of costs between Liberty and the plaintiff or, alternatively, that “all pending motions between the plaintiff and Liberty be mutually withdrawn with costs reserved for determination by [the motions judge].”

[54] Two motions, occupying one and one-half day of court time, being the summary judgment motion and the pleading amendment motion, proceeded because the parties could not agree on costs sustained to December 2017/January, 2018, or even a mechanism for the determination of these costs.

[55] In the peculiar circumstances of this case, both parties served offers that had as their foundational element the withdrawal of Liberty’s summary judgment motion and the rendering moot of the pleadings amendment motion. This reduced the dispute to the issue of costs: in the case of the plaintiff, the dispute on costs of the summary judgment motion to the date that it was transformed through pleading amendment; in the case of Liberty, the costs of the summary judgment motion overall. Neither party handled this issue in a manner that would ensure that the goals of efficiency and proportionality were met. It would not be fair to award elevated costs to the successful party in these circumstances. The matching settlement proposals effectively neutralize each other.

[56] The plaintiff’s cost award on the summary judgment motion will be assessed on a partial indemnity basis.

Quantification of Costs

[57] Section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides the court with discretion in the determination of the quantum of costs. The exercise of this discretion may be guided by the principles set out in Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, and applicable jurisprudence. In particular, I have taken into consideration the following:

a) Complexity of the Motion,

b) Importance of the Issue,

c) Staffing of the Application,

d) Conduct that Affected the Length of the Proceeding, and

e) Reasonable Expectation of Cost Exposure.

[58] The overarching objective of quantification of costs is to determine an amount that is fair and reasonable, understanding that the mathematical quantification of what the successful litigant has spent in legal fees is pertinent but not dispositive. In Zesta Engineering Ltd. v. Cloutier (2002), 21 C.C.E.L. (3d) 161 (C.A.), at para. 4, the Court of Appeal stated: “[i]n our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant.” The quantification of costs is not a mere mathematical exercise in as much as a determination of what is fair and reasonable. In Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.) at para. 26, the Court of Appeal cautioned against approaching the issue of costs as a simple mechanical exercise:

The express language of Rule 57.01(3) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 makes it clear that the fixing of costs is not simply a mechanical exercise. In particular, the rule makes clear that the fixing of costs does not begin and end with a calculation of hours times rates. … Overall, as this court has said, the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.

[59] In relation to the four cost awards in favour of Liberty, I have determined that the following amounts shall be assessed in costs:

a) Costs of the September 2017 Motion to Stay: Liberty incurred a total of 34.7 hours of time in responding to this motion, which is reasonable considering the volume of materials filed by the moving party plaintiff. The hourly rates applied are at an acceptable partial indemnity rate. The partial indemnity costs sought are $11,635.50 plus HST and disbursements for a total of $13,261.12. I find this acceptable and award costs of this motion in this amount.

b) Costs of the September 2017 Adjournment: Liberty seeks costs thrown away of $14,500 associated with the inability to argue the summary judgment motion on its initial return date and the costs wasted in preparation to do so. Liberty supports this amount solely on the basis that Liberty was awarded $17,500 in costs thrown away in the adjournment of its summary judgment motion on January 3, 2018 and that the sum of $14,500 is a reasonable quantification of costs thrown away in similar circumstances three months earlier. All matters considered, taking into consideration the time and expense incurred by Liberty in preparing for the motion for stay that was argued on September 29, 2017, and because much of the preparation incurred for September 29, 2017 was used in subsequent hearings in regard to which Liberty has received costs, I fix costs thrown away by Liberty in the September 29, 2017 adjournment in the amount of $4,000, all inclusive, which represents approximately ten hours of wasted preparation time, plus applicable taxes.

c) Costs of the Pleading Amendment Motion: The plaintiff’s motion to amend the 2nd Amended Statement of Claim was delivered in December 2017, in close proximity to the holidays and on short notice. Liberty contends that it thereby was required to marshal resources promptly and over the holidays in order to respond on January 3, 2018. Liberty seeks costs of the pleading amendment motion in the amount of $22,118.50 plus taxes and disbursements for a total of $26,010.91. Liberty submits that it incurred 65.1 hours of lawyer’s time at partial indemnity rates to respond to the myriad amendments sought by the plaintiff. These costs were incurred both on January 3, 2018 at the initial return of this motion, and on the one-half day argument of the motion on January 18, 2018. Liberty submits that this amount of costs is patently reasonable when contrasted with the costs sought by the plaintiff for the same motion: $74,832.50 plus disbursements and HST for a total of $85,335.73, which consists of 185.3 hours of lawyer’s time and 60.25 hours of law clerk’s time. As I determined earlier (para. 26), there was divided success on this motion. As such, I assess the costs to Liberty of the pleading amendment motion in the amount of $12,000, all-inclusive.

d) Costs of the Expert Report Motion: Liberty seeks $8,652.50 plus disbursements and taxes for a total of $10,003.33, in costs for responding to the motion for leave to admit the report of Mr. Kruse. This consists of 25.4 hours of lawyer’s time at proper partial indemnity rates. The time incurred was spread over the three return dates of Liberty’s summary judgment motion as, on each occasion, the plaintiff sought to admit Mr. Kruse’s report into evidence and Liberty was required to address this issue. Liberty was also required to prepare written submissions in relation to this issue. However, this was not a complex motion and involved the application of two governing case authorities. All matters considered, I award Liberty costs of the motion for leave to admit the report of Mr. Kruse in the amount of $5,000, all inclusive.

Assessing Costs of the Summary Judgment Motion

[60] The plaintiff seeks Costs of the Summary Judgment Motion in the amount of $216,486.25 plus HST for a total of $243,910.46. On a partial indemnity basis, the plaintiff’s cost demand is $196,312.33, all inclusive. This comprises 704.75 hours of time by three lawyers and a law clerk. In other words, using a 40 hour work week, the plaintiff submits that over 17 weeks of time, the equivalent of over four months of full-time work, was dedicated to responding to this summary judgment motion. The plaintiff’s response to the motion was staffed by two senior lawyers (1982 and 1984 Calls to Bar), a lawyer called to the Ontario Bar in 2015, and a licensed paralegal.

[61] I agree with the statement by Nordheimer J., as he then was, in Basedo v. University Health Network, [2002] O.J. No. 597 (S.C.J.), that: “I do not consider it the role of the court to second-guess the time spent by counsel unless it is manifestly unreasonable in the sense that the total time spent is clearly excessive or the matter has been ‘over lawyered’.” I find that the total time spent in responding to this motion is clearly excessive. There are over 108 hours of lawyer’s time on administrative work, resulting in over-staffing. There are over 400 hours of overlapping lawyer’s time in preparation for the summary judgment motion. Even though this amount of time might have been considered necessary and thereby incurred, there can be no reasonable expectation that it is recoverable in a cost award. Similarly, there could be no reasonable expectation on the part of Liberty that such an amount of costs would be in issue on a summary judgment motion of this nature.

[62] Liberty contended that the plaintiff conducted its response to the motion in a disproportionate manner, resulting in wasted costs. Liberty points to the volumes of “corrected” and “revised” materials that caused the record to inflate unnecessarily and resulted in inefficiencies. Multiple volumes of materials were replaced or corrected, from hearing to hearing, and certain materials were replicated in multiple locations in the record. This resulted in inefficiencies. Had the summary judgment motion been argued on its first return date on September 29, 2017, the costs would have been only a portion of those ultimately incurred. The plaintiff’s conduct tended to lengthen unnecessarily the proceeding, which is a factor in cost assessment: Rule 57.01(e) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[63] Liberty submits that it was not within its reasonable expectation or, indeed, the reasonable expectation of any party that the response to a summary judgment motion of this nature ought to generate nearly a quarter-million dollars in cost exposure. I agree. This is a factor in cost assessment: Rule 57.01(0.b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Liberty’s summary judgment motion was of moderate complexity, particularly as Liberty set out to prove a negative: Rule 57.01(c) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The legal issues involved do not support the magnitude of time submitted for assessment.

[64] I am mindful of the Court of Appeal’s clear statement in Boucher, para. 26, that cost assessment is not a mere mechanical exercise of computing hours and hourly rates but rather an analysis of the amount that is fair and reasonable for the unsuccessful party to pay. All matters considered, I assess the costs payable by Liberty to the plaintiff in the dismissal of the summary judgment motion on a partial indemnity basis in the amount of $60,000, all inclusive.

D. Disposition

[65] Taking into consideration all applicable principles, including those set out in Rule 57.07(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, and in the exercise of the discretion provided by section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, I have determined that it is fair and reasonable to award costs of Liberty’s summary judgment motion, and the reserved cost issues on motions that derive from it, as follows:

a) YRSCC No. 1206’s claim for restitution of three cost awards rendered in favour of Liberty on November 3, 2017; January 3, 2018; and January 12, 2018, is dismissed;

b) No costs are awarded against, or in favour of Darcon;

c) Liberty is awarded the Costs of the September 2017 Motion to Stay, payable by YRSCC No. 1206 on a partial indemnity basis, fixed in the amount of $13,261.12, all inclusive;

d) Liberty is awarded the Costs of the September 2017 Adjournment, payable by YRSCC No. 1206 on a partial indemnity basis, fixed in the amount of $4,000, all inclusive;

e) Liberty is awarded the Costs of the Pleading Amendment Motion, payable by YRSCC No. 1206 on a partial indemnity basis, fixed in the amount of $12,000, all inclusive;

f) Liberty is awarded the Costs of Expert Report Motion, payable by YRSCC No. 1206 on a partial indemnity basis, fixed in the amount of $5,000, all inclusive; and

g) YRSCC No. 1206 is awarded the Costs of the Summary Judgment motion, payable by Liberty on a partial indemnity basis, fixed in the amount of $60,000, all inclusive.

Sanfilippo J.

Date: September 20, 2018